It seems that Greece “needs” $145 billion to roll over its debt. Instead of throwing money at them, how about this?
-every German family MUST vacation in Greece (they have to stay 2 weeks, spend at least $2000)
-every EU resident MUST buy 1 bottle of Greek olive oli, and 2 bottles of Greek wine
-airfares to Greece reduced 50%
-encoorage EU pensioners to move to Greece
Wold it not be better to get something out of this, rather than just piss the money away?
So your proposal is to throw money at them in the most intrusive possible manner?
Aside from the legality of such mandates, the Greek economy is more than wine, olive oil, and tourism. And some folks might not want to bankrupt the airline industry in order to save Greece.
How much would it take to make even the most minimal real difference?
If everyone – or, say, just one person in one hundred – in Europe and America increased their consumption of Greek exports by a tenth of a per cent, would it add up to a little, or a lot?
I like a good bottle of Retsina, so I’ll do my bit! (Ouzo, on the other hand, I don’t care for so much!)
Seriously, is there a workable “free market” solution of this sort?
I’m not sure Greece would welcome another compulsory influx of Germans, even to save itself.
There’s a great (and somewhat sobering) ‘choose your own adventure’ style game on the Crooked Timber blog, here’s the html version for ease of clicking.
I ended up on 53 when I went through (transfer payments from the rest of the Eurozone, a writedown of debt and Greece staying with the Euro), but as Maynard said Germany has politics too.
My point was that the German taxpayers will be paying anyway-and just rolling over the Greek debt does nothing to stimulate demand in Greece. Why not set up something where:
A) the Germans taxpayers will get something (vacation in Greece)
B) demand for Greek products will send money into Greece, and go into pockets that need it
Just sending money that will be lost anyway maks little sense to me.
And I suppose someone is going to magically ensure that each German family can afford to vacation in Greece?
The real solution is to stop paying the banks = creditors and instead pay the debitors.
The same solution would have solved a lot of the problems during the US housing bubble collapse.
One article about Greece here
And here’s an older post about bailing out the banks
The current solution of cutting expenditures for the poor people in Greece is the worst, because austerity stifles internal economy.
The better solution would be to go after the big fishes who’ve evaded taxes: Banks (who often moved across the border to do so - so a EU-wide tax system closing loopholes would be better, but hotly contested by poor nations like Ireland or Bulgaria trying to draw industries with special low taxes) and rich people.
Who of course have the most power over politicans. When the media says that real estate taxes can’t be collected because the real estate boundaries and owners have never been registered; or that middle-class professionals, including doctors, only take cash to avoid taxes (which in some cases are up to 70% because not enough taxes are coming in) - then you know that there’s a lot wrong there that can’t be fixed just by cutting pensions or firing some ten thousand govt. workers.
So your idea is to go after businesses that stuck to the law, just because you don’t like that they chose the strategy that maximizes profit? Or alternatively go after some of the proffessionals that evaded taxes, while letting others get away with it. The whole of Greece screwed up (it is a democracy you know, it isn’t just ‘landowners’ that are allowed to vote) and the whole of Greece will feel the consequences. The Greek internal economy is not the imediate concern of the rest of the Euro area, they have the choice to bow to the demands of the other countries or get out of the Euro. Their choice.
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Why only families and not singles?
1a. Only German nationality families or families living in Germany? Because there are about 4-5 mil. Turkish-descent people living in Germany, who prefer to go Turkey instead during vacation to see the rest of their families still living there. -
A lot of German families are not very rich. Many have cut their yearly vacation because of the recession in the past years, or take cheap package deals to Turkey.
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There are 10 mil. Greeks, but 80 mil. Germans. Even if you exclude
-every EU resident MUST buy 1 bottle of Greek olive oli, and 2 bottles of Greek wine
-airfares to Greece reduced 50%
-encoorage EU pensioners to move to Greece
Wold it not be better to get something out of this, rather than just piss the money away?
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I ended up on “the full Argentina” when I did that (#52 I believe).
One entertaining proposal I saw, though it wouldn’t have much effect at the moment, would be to make Athens the permanent site of the summer Olympics. Not likely to happen, to say the least.
Germany is a democracy. It’s not possible to force Germans to holiday in Greece or buy Greek products.
I’ve had a similar idea about foreign aid in general. Taxpayers hate sending money to foreign countries for no perceived benefit. Offer free trips to taxpayers instead with an amount of money they must spend in the country. Country X gets the economic benefit, taxpayers get something out of it, and the increase in international understanding will probably be a good benefit, too.
Sorry, got cut off on Fasching.
Even if you exclude singles and Turkish people, there are still far too many tourists for the available facitilies.
Even if we assume you mean only residents over 18 years of age for the wine, and households rather than people for the oil, half or one third of 500 mil. (EU) is probably more than the wine and oil that Greece currently produces.
Not all airlines belong to the state, many are private. So this would either not work or move the problems to private industry.
A lot of people in their old age don’t want to move to a foreign country (with a foreign alphabet, too, in this case) and have the trouble of learning a new language.
While Greece is pleasant for vacation, the summer temps. regularly rise above 40 C, which is too hot for old people. There’s also not the same infrastructure as in the northern countries (partly due to the corruption already mentioned).
Yes, there are cases of pensioneers moving to warmer countries with pleasant people and where the cost of living is lower - thailand I think has made some moves to build closed villages for British pensioneers, and some people move to Mallorca. But those are still a minority, because most old people don’t want to move away from the city and people they know.
And Greece isn’t the only contender - East German cities faced with exodus have started a campaign several years back to entice west german pensioneers to live there cheaper. Not a lot of people are eager for the East, however.
Greece is not only a hot country, it has very little drinking water due to geology and metereology (like Spain and Italy, too). Suddenly increasing the population rate would be an extreme strain on the available resources. Clean water is currently produced very inefficiently with big factories using a lot of electricity, and then shipped out to the remote islands. On the mainland, the forest that could contain water has been chopped down during the Ancient Greeks, or more recently burned down by people profiting from selling land.
Another point about “saving money by cutting expenditures”: Angie is a consie, so she’s not on the side of what’s good for the people, but of the corporations. About two years ago, when the first problems with Greece showed up, one of the expenses that wasn’t cut was a 55 mio. Euro arms deal - with German industry. So money taken from tax payers and cut for pensioneers was transferred to private companies.
Greece general has one of the highest military expense budgets relative to the whole budget, because of their ancient emotional problems with the Turks. Yet this isn’t addressed at all during expense cuts.
Cutting expenses by firing public employees is also a stupid measure. Instead of getting a wage and spending it on internal consumption, the people will now get unemployment pay (still from the state) but reduce internal consumption.
They’re not simply going to take private industry jobs because, like a lot of other broke and poor countries, Greece has high unemployment rates.
A smarter move would be train people superfluous in one public sector for another sector, like tax collectors. Sure, that would take some time, but make more sense in the long run.
Foreign aid done by the states or multi-state agencies like World Bank is already done solely for the benefit of the giving country. Cecil once showed how US Aid for every 100$ over 70$ profit US companies, starting with the farmers from whom the products are bought, continuing with US shipping and trucking companies.
World Bank is even worse, intentionally handing out money to corrupt presidents for guarantees to abolish social systems in the developing countries, all so that the people who invest into the world bank can have a guaranteed return rate.
Or projects like the Assuan dam - the money went to the western companies who built the dam; the natives suffer from an increase in disease and a lack of natural fertilizer (mud), and the electricity is spent producing artifical fertilizer, which the natives then have to buy.
Sending ignorant rich tourists to poor countries to see how their tax dollars work also smacks a lot of Using a poor kid to teach a lesson, which is not what charity should be about.
Of course, foreign aid is generally not motivated by charity or shared humanity or “there but for the grace of god (and robber-baron capitalism) go I” but on geopolitical strategy, helping your own industry with contacts and creating a lot of PR from very little substance.
More like going after those (bankers and financiers) who sunk the ship instead of giving them a golden rescue boat all on their own, while the rest of the population are left to drown.
The whole of Greece didn’t screw up. They elected politicans that were corrupt because the majority of politicans are corrupt, so they don’t have much of a choice; and they got screwed over by financiers attacking the currency and economy to make profit.
If for example banks are granted an exception to paying taxes, that’s passed by a few corrupt politicans, and not the whole of Greece. Depending on how wide the law is, how good reporting is etc., the public may not even know about it.
And no, the whole of Greece won’t feel the consequences. That’s why there are demonstrations: it’s the poor people who are bearing the cuts, while the rich can continue their corruption.
Instead of the normal citizens uniting to protest against the big guys, the yellow press instead delights in feeding to stereotypes of “lazy Greeks” and “Nazi Germans”, to keep citizens from rioting against the real culprits.
This is incredibly ignorant of general economics. Income for the state is generated by taxes, which means that business needs to be running instead of shut down (and paying taxes on their earnings, too).
If local economy for Greece goes up and taxes go up, too, than Greece is out of the problem zone and can pay back the loans.
If on the other hand because of the idiot austerity course, local consumption falls, then taxes fall, too, and Greece digs itself in deeper, leading to a negative circle.
That’s the extremely basic circle. Of course there are dozens of factors influencing this, starting with “how high are the taxes? What is taxed and what not? How many people pay their taxes and how many avoid them?”, and “How much is produced and consumed inside the country vs. import and export” (You earn much less by importing cheap plastic from China and selling it than making your own stuff).